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Analysis: Why Singapore went into the casinos industry

Two casino resorts are expected to boost tourism, generate 45,000 jobs and attract 10 million visitors by 2015.

A Bank of America-Merrill Lynch report found that 50 to 60 percent of casino frequenters are Singaporeans. But the whole point of levying a fee for Singaporeans to enter the casinos was to keep local citizens away from the vice within. From an economic standpoint too, foreign high-rollers bring in the most money.

Then there’s the spike in people seeking help for gambling-related problems. Singapore’s National Council on Problem Gambling says callers to its helpline have more than doubled since the first casino opened; 520 calls were made to the helpline in March, compared to an average of 200 calls from October last year to February 2010.

But even if the casinos fail, Singapore may still be in a win-win position, argues one economics expert.

“The biggest effect from less gambling is simply that billions of dollars would not flow from consumers to wealthy casino owners. Hey, that's not so bad. In fact, it's good,” wrote Larry Haverkamp, in a letter to The Straits Times, Singapore’s national broadsheet. Haverkamp is an adjunct professor of economics at the Singapore Management University. He says that even if the casinos fail, the biggest investors in the project have been foreign wealthy risk-takers, “who will still survive in luxury.”

Economic factors aside, the real question is how Singapore’s government will retain its stronghold over society. Some say vice is not new at all in Singapore; it’s just always been kept well-hidden from Western eyes.

“There are already plenty of other forms of 'vice' in Singapore. People are free to bet on horse racing and other sports. Everybody knows where to find prostitutes. I don’t worry about bringing vice into Singapore because it is already there,” argued one former soldier who served in the Singapore Armed Forces. Although he now resides in the U.S., the soldier has requested anonymity to protect his reputation if he searches for future jobs in Singapore. “I believe that the vast majority of Singaporeans are mature enough to manage the lure of gambling in the casinos with their own financial responsibilities,” he added.

Singapore seems to be well aware of the crime that casinos often bring. The government introduced strict rules on junketing — gambling trips for wealthy high rollers organized by independent operators — to curb money-laundering. In early April, three European tourists were charged for cheating. If convicted, two Frenchmen and a Spaniard face up to 10 years in prison. With the government’s strong law enforcement, coupled with a newly formed Casino Crime Investigation Branch of the police force, some argue that the Singaporean model is unlikely to follow the vice-ridden examples of Macau and Las Vegas.

As Singapore waits for the results from its foray into this unknown industry, one thing is for certain. With careful master-planning, the government tries desperately to retain the social mores and law and order it has earned an international reputation for. While it’s still too early to accurately assess the economic and social impact of the resorts, for now all bets are on for the success — at least monetarily — of Singaporean casinos.

Ruchika Tulshyan is a graduate of the Columbia School of Journalism. She has lived in Singapore, London and New York, and has an interest in covering international economies and markets.